Somebody should tell Energy Secretary Steven Chu that commencement speakers are supposed to give new graduates good advice. His Harvard commencement address last Thursday laid out some pretty poor premises for addressing the challenge of climate change:

If the world continues on a business-as-usual path, the Intergovernmental Panel on Climate Change predicts that there is a 50-50 chance the temperature change will exceed five degrees by the end of this century. ... A world 5 degrees warmer will be a very different place.

The change will be so rapid that many species, including us, will have a hard time adapting.

That sounds scary, but there are some problems with it.

One is that the Intergovernmental Panel on Climate Change (IPCC) wisely avoids asserting a “business as usual” path, because it recognizes the difficulty in projecting world economic and population growth over a century. Instead, it describes six “marker scenarios” for global development and provides probability distributions for projected warming under each.

Under no marker scenario does the IPCC project a 50-50 chance of more than 5 degrees Celsius warming by 2100. Expected warming by scenario ranges from a low of 1.80C to a high of 4C. A more realistic representation of the over-under bet from the IPCCs current assessment report is about 3C of warming by 2100.

A second is that, according to the IPCC, a global temperature increase of 4C should cost the world about 3% of economic output. So if we do not take measures to ameliorate global warming, the world should expect to be about 3% poorer than it otherwise would be sometime well after 2100.

Because we expect secular economic growth, this 22nd century world should still be far richer, even after warming damages, than our world is today. This doesnt quite comport with the rhetoric of global devastation.

Trying to avoid these potential future damages wouldnt be free. Yale professor William Nordhaus, arguably the worlds pre-eminent authority on this trade-off, uses the probability distributions for potential impacts to estimate that the total expected net benefit of an optimally designed, implemented and enforced global carbon tax equals about 0.2% of the present value of future global economic consumption.

We wont get an optimal regime in the real world of domestic politics and geostrategic competition. The economic drag created by the deals necessary for such a global arrangement means that the expected benefits of global emissions mitigation would not cover expected costs.